The Bulgarian Presidency successfully concluded the trilogue on the Proposal for a Regulation of the European Parliament and of the Council of the EU on Controls on Cash Entering or Leaving the Union and Repealing Regulation (EC) No 1889/2005

2018-07-05

The National Customs Agency chaired two preparatory bodies at the Council of the EU, viz. the Working Party on Customs Union and the Customs Cooperation Working Party, and successfully managed to achieve all priorities, set out for them.

One of the main challenges before the National Customs Agency during the Bulgarian Presidency of the Working Party on Customs Union at the Council of the EU was to achieve the agreement between all three institutions (Council of the EU, European Commission and European Parliament) regarding the Proposal for a Regulation of the European Parliament and of the Council on Controls on Cash Entering or Leaving the Union and Repealing Regulation (EC) No 1889/2005.

The new aspects of the Regulation relate to enhancing the scope of the definition of the term "cash" adding goods, used as highly liquid value storage media (e.g. gold), and prepaid cards to the current one (viz. banknotes, coins and bearer-negotiable instruments). Control of the carriage of money through postal and cargo shipments, empowering competent authorities to temporarily detain cash over specific periods of time in instances of suspicions, relating to money laundering and terrorist financing, a regulated exchange of information between MS and third countries, approximation of MS sanction regimes, uniformity of the money carriage declaration storage duration, etc. are envisaged.

Three political trilogues, technical trilogues and a series of informal meeting with the EP and the EC were held during the first half of 2018. During these, the National Customs Agency representatives held the negotiations in a manner, aimed at reaching consensus between the three institutions on the Regulation. The Working Party on Customs Union held discussions, aimed at the approximation of MS standpoints on the text in light of the differing procedures, implemented in the 28 EU MS. The major issues, faced during the discussions, related to the competent authority powers, the duration of temporary retention of cash, information to Financial Intelligence Units and citizen personal data protection, as well as the storage period for customs declarations.

The political agreement on the Cash Controls Regulation, reached on May 23, 2018, was publically reported by Roberto Gualtieri, Chair of the Committee on Economic and Monetary Affairs (ECON), who participated in the negotiation process. Mr. Pierre Moskovici, European Commissioner for Economic and Financial Affairs, Taxation and Customs, also stated his satisflaction with the agreement reached. He congratulated the Council and the EP and stated that this development will better enable customs to control cash flows at EU borders as it constitutes a step forward in combatting terrorist financing. The proposed Regulation was approved by COREPER on June 27, 2018 and will be voted on by the EP during its autumn sessions. The new Regulation will enter into force on the 20th day after its publication in the Official Journal of the EU and will become applicable 30 months thereafter.

The exchange of customs-related information with third countries was also among the main priorities of the Bulgarian Presidency on the field of customs. As such, the National Customs Agency hosted a High-level Seminar, jointly organized with DG "Taxation and Customs Union" under the EU Customs 2020 Programme. The meeting was attended by 78 representatives of MS customs administrations and countries, participating in the Programme. The points discussed and agreed on included the potential scope, purposes, benefits, conditions, media and obstacles to achieving an enhanced exchange of customs-related information. The presentation of EC Proposal on the exchange of customs-related information between the EU (EC and MS) and third that is subject to pending approval by the College of Commissioners is eagerly awaited.

The Bulgarian Presidency drafted third and fourth compromise texts on the Proposal for a Regulation of the European Parliament and of the Council on the Import of Cultural goods that were discussed in a total of ten Working Party meetings. The Presidency drafted and ensured the approval of Council Conclusions on the Court of Auditors' Special Report on EU Customs N 19/2017 on Import Procedures: Shortcomings in the Legal Framework and an Ineffective Implementation Impact the Financial Interests of the EU. The Proposal for a Council Regulation temporarily suspending the autonomous Common Customs Tariff duties on certain goods of a kind to be incorporated in or used for aircraft, and repealing Regulation (EC) No 1147/2002 was also approved. Regular amendments were made in the Proposal for a Council Regulation amending Regulation (EU) No 1387/2013 suspending the autonomous Common Customs Tariff duties on certain agricultural and industrial products and the Proposal for a Council Regulation amending Regulation (EU) No 1388/2013 opening and providing for the management of autonomous tariff quotas of the Union for certain agricultural and industrial products. EU positions for various meetings of World Customs Organisation formats and Joint Customs Cooperation Committees were also approved.

The Working Party on Customs Union with the Council of the EU reviews issues, topics and files relating to the customs legislation of the Union and coordinates the relations with non-EU countries in the field of customs. It held a total of 13 meetings under the Bulgarian Presidency, one of which took place in Bulgaria. In addition, two more "attachés only" extraordinary meetings were necessitated. The National Customs Agency assisted the attendance of a group of students from the Dimitar A. Tsenov Academy of Economics in Svishtov.

At the European level, the Customs Cooperation Working Party is the other body, chaired by the Bulgarian customs administration that is tasked with coordinating the operational cooperation among national customs administrations with the purpose of enhancing their law-enforcement capabilities. Its work is aimed at producing results in identifying new threats to EU internal security, but also the prevention and detection of customs infringements and crimes. Along these lines, the Working Party cooperates closely with EC bodies, viz. DG TAXUD, DG HOME, OLAF, Europol and the European Border and Coast Guard Agency (Frontex). It sets strategic and tactical objectives, as well as risk areas for conducting joint customs and customs-police operations.

Over the duration of the Bulgarian the reporting of the implementation of the 8th Customs Cooperation Working Party Action Plan for the period 2016-2017 was finalized and the mandates for the priority target groups within the 9th Action Plan (2018-2019) were approved as targeting illegal production and contraband of excisable goods, illegal trafficking of chemicals and precursors for explosives, illicit cash movements, IPR infringements, cybercrime, etc.

The Bulgarian Presidency held a Coordination Mechanism Meeting with representatives of the Law-enforcement Working Party, Europol, Frontex and the Commission and prepared a document, detailing already held and forthcoming joint customs and customs-police operations in 2018.

The Standing Committee on Operational Cooperation on Internal Security (COSI) approved the "Synergies and opportunities for coordination between the activities developed under the EU Policy Cycle and the Ninth Customs Cooperation Working Party Action Plan for the year 2018" paper that was developed by the Customs Cooperation Working Party with the purpose of aligning the work of competent customs and police authorities on countering cross-border criminal activity, relating to the illegal trafficking of narcotic drugs and arms, money laundry, etc.

A thematic session was held on the implementation of Directive (EU) 2016/681 of the European Parliament and of the Council of 27 April 2016 on the use of passenger name record (PNR) data for the prevention, detection, investigation and prosecution of terrorist offences and serious crime, where a discussion was held to address the significance of the participation of customs administrations in the national air passenger reservation data processing units (PIU - Passenger Information Unit) and best practices for efficient and effective customs control at European airports were presented.

Considering the increased necessity customs administrations face to tackle non-fiscal issues and with the purpose of enhancing supply chain security, the Bulgarian Presidency launched the discussions of the "Enhancing Customs Contribution to EU Internal Security" paper that is targeted at achieving this result through further developing the cooperation with other law-enforcement bodies, viz. police and border guard, but also Europol and Frontex within the perspective of the EU Policy Cycle (2018-2021) to enable a more effective fight against terrorism and cross-border crime. A discussion session was held to set out significant topics to be discussed at the forthcoming September 2018 joint meeting of European police chiefs and EU MS Directors General for customs that will held at the Europol HQ.